Spain’s Booking.com Fine Highlights Growing Tensions Over Tourism Boom
Spain’s anti-trust watchdog, CNMC, has fined online reservation giant Booking.com a staggering 413.2 million euros ($448 million) for abusing its dominant market position over the past five years. The penalty comes amid growing tensions and protests over the impact of mass tourism on local communities.
In a statement on Tuesday, CNMC announced it was imposing two fines of 206.6 million euros each on Booking.com, a unit of New York-listed Booking Holdings. The watchdog accused Booking.com of leveraging its 70%-90% market share since 2019 to impose unfair conditions on hotels and restrict competition from other providers.
“Booking.com has been using its dominant position to enforce unfair conditions on Spanish hotels, including banning them from offering lower prices on their own websites and unilaterally imposing discounts on rooms without consulting the hotels,” CNMC said. Furthermore, Booking.com forces Spanish hotels to sue in the Netherlands in case of disputes, adding to the burdens faced by the hoteliers.
Booking Holdings expressed strong disagreement with CNMC’s findings and intends to appeal the fines. “We believe the issues raised by CNMC should be addressed under the European Union’s Digital Markets Act rules,” a company spokesperson said.
The fines stem from complaints filed in 2021 by the Spanish Association of Hotel Managers (AEDH) and the Madrid Hotel Business Association. CNMC’s ruling is seen as a significant victory for these organizations, which have long argued that Booking.com’s practices stifle competition and harm local businesses.
Growing Discontent Over Mass Tourism
The fines against Booking.com come against a backdrop of increasing public dissatisfaction with mass tourism in Spain. On July 20, a collective of several hundred associations, known as Ecologistas, marched through the town of El Puerto de Santa Maria, chanting, “Our city is not for sale!” This followed a similar protest in Barcelona on July 6, where thousands of residents marched to denounce the excess of visitors, and another large demonstration against mass tourism on July 22 in Mallorca.
Spain recorded an additional 24 million tourists in the first quarter of 2024 compared to the same period the previous year, an annual increase of 14.5 percent. The tourism boom has driven up prices in shops and housing costs, making it difficult for locals to find affordable housing. Barcelona, Spain’s most-visited city, hosts some 12 million tourists annually, many arriving by cruise ship, exacerbating pressures on health services, waste management, water supply, and housing.
“Tourists, go home!” chanted around 3,000 protesters in early July, some even using water pistols to spray those they identified as tourists. In response, authorities announced plans to bar apartment rentals to tourists by 2028, resulting in the loss of licenses for 10,000 short-term rental apartments on platforms like Airbnb. Mayor Jaume Collboni also proposed raising the tourist tax for cruise passengers visiting the city for fewer than 12 hours.
Economic Impact and Future Measures
Despite the backlash, the tourism sector remains a crucial source of income for Spain. In the first quarter of 2024, tourist spending surged by 22.6 percent, surpassing 31.5 billion euros, according to the National Institute of Statistics. However, the surge in visitors and prices also underscores the urgent need for sustainable tourism practices.
Popular European destinations like Barcelona, Seville, Venice, Étretat, Athens, and Paros, which suffered a tourism slump during the COVID-19 years, are now experiencing a resurgence. Encouraged by low-cost flights and social media promotions, tourists are flocking back, straining local infrastructure and resources.
This decision could set a precedent, encouraging other nations to scrutinize the practices of dominant market players in the tourism sector. It is a delicate balance between promoting tourism for economic benefits and protecting local communities from its adverse effects.
As Spain grapples with the challenges of mass tourism, the resolution of Booking.com’s appeal and the implementation of new regulations will be closely watched by other countries facing similar issues. The outcome may well shape the future of the global tourism industry and its relationship with local economies.
David Thompson
Financial Desk
